Pensions Pyramid scheme

toomsie

This morning Martin Lewis was talking about pensions
. I was shocked. Did he not know that UK pensions is a ponzi scheme. And that eventually it is a bumble that will burst. Is he a sellout.

Then I bumped into his blog. He acknowledged that it is a ponzi
scheme and is the best system we have.

Sorry I cannot post the link as I am a new user.

Lokolo

What are you on about?

UK pensions aren't a ponzi scheme. Perhaps you should look up the definition?

little_monkey

Lokolo wrote: »

What are you on about?

UK pensions aren't a ponzi scheme. Perhaps you should look up the definition?

http://blogs.telegraph.co.uk/finance/ianmcowie/100006636/state-pension-ponzi-scheme-unravels-with-retirement-at-70/


http://blog.moneysavingexpert.com/2009/03/27/is-the-state-pension-a-ponzi-scheme/

Lokolo

little_monkey wrote: »

http://blogs.telegraph.co.uk/finance/ianmcowie/100006636/state-pension-ponzi-scheme-unravels-with-retirement-at-70/

Ah talking about the state pension I see.

toomsie

I tried to talk about pensions at work, they wouldn't listen. I am sure many of then know Martin Lewis from TV. They will at least listen to him. I will show them a link.

Aegis

State pensions and private or work pensions are very different things. Don't put people off saving for their retirement through ignorance, instead learn more about the differences and encourage your colleagues to save into the work pension - it's likely to be one of the best long term financial decisions they make.

real1314

It's very different from a Ponzi scheme.

1. It doesn't claim to be based on capital investment
2. It doesn't disguise how the payments are funded
3. It doesn't claim to offer a "return on investment"
4. The payments are not pre-determined and can be adjusted based on the expected payout to maintain the effectiveness of the scheme
5. The receipts can also be adjusted and are required by legislative processes.

You might want to think about the likelihood of the state pension scheme's potential to fundamentally collapse - it's very low. In fact it's unlikely to collapse before almost every other economic area, including private pension investments that are held in actual capital funds.

You might also want to consider it as a form of accrued tax rebate for taxation paid during pre-retirement.

If you ran a ponzi scheme that accounted for the birth rate and death rate, and matched potential payments with potential investments, it would not collapse.
You never run out of investors as there are more being born.
Your payouts are limited as people die.
The "return" is adjusted to match receipts.

e.g population 50 million, 40 million paying in at £1 per week each, 10 million claiming at £4 per week each. Move the retirement age to maintain the ratio. Simple really. You would think that a decent journalist would be able to grasp it, rather than producing disingenuous comments. :cool:

mania112

I haven't read the articles or seen ML on TV talking about them, but I assume the comparison to a Ponzi is simply that there isn't enough money in the pot to pay everyone if we were all able to claim our pension at the same time?

If that is the case, isn't every bank in the country also a Ponzi scheme?!

atush

I am shocked.

A newbie who clearly knows nothing, and doesn't even understand the difference between the State pension and other pensions is here claiming Martin is on the take and the the givt is running a ponzi scheme.

Now he is going to go back to his work and scare off any of them in even joining a pension.

I know we are supposed to be nice to newbies, but not ones that are so.......whatever this guy is.

Ridiculous.

Jack_Griffin

No it isn't a ponzi scheme, but it was running into serious trouble because of the high level of UK government debt & the number of new pensioners coming through exceeding the number of workers to support them and of course people generally living longer..

That is why the changes to the pension scheme have come in to soften the blow the demographic blip will have..

mania112

atush wrote: »

I know we are supposed to be nice to newbies, but not ones that are so.......whatever this guy is.

He's been a member for 2 years, so it's ok!